2021 (4) TMI 1334

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....tional depreciation amounting to Rs. 59,10,918/- on the basis that the assessee does not fulfill the conditions under section 32(1) (iia) of the Act. In the second appellate proceedings before ITAT, ITAT after considering the submissions of the assessee, set aside and restored the issue back to the file of AO for consideration of depreciation as per law and taking into account the details submitted by the assessee. The AO passed order giving effect to the order of ITAT, which was further rectified vide order dated 23.3.2017. In the rectification order under section 143(3)/254/147 of the Act, on the issue of additional depreciation the AO granted relief of Rs. 37,48,136/- and sustained the disallowance of Rs. 21,62,782/- with the finding tha....

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..... Before us, Ld AR brought to our notice findings of Ld CIT(A) in para No. 2, 4, 5 and he brought to our notice the purpose of introduction of additional depreciation with effect from 1 April 2006. He brought to notice the reasons for enhancement of the additional depreciation from 10% to 20% and submitted that the main purpose is to encourage new investment in the manufacturing sector and in order to increase the installed capacity for availing the initial depreciation. He stressed the point that the relevance is for installation. Further he brought to our notice following case law:- i) PCIT vrs. IDMC Ltd. (2017) 78 taxmann.com 285 (Guj) ii) JCIT vrs. Lotus Energy (India) Ltd (2016) taxamnn.com 364 (Mum-Trib) iii) Euro Pratik Ispat P....

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....d installed after 31.3.2005. In our opinion, provisions of section 32(1)(iia) of the Act, do not requires that the P&M has to be put into use in the year in which it is acquired for the purpose of claiming AD. From the reading the explanatory notes; with regard to introduction of the section in the relevant year; it is evident that what is important and material is the year of acquisition in the case of ships or aircraft and the year of installation in the case of machinery or plant. If the installation of a plant is spread over more than a year, the relevant year for the grant of allowance would be the year in which the installation is completed. As in the case of investment allowance, so also in the case of AD, the material date is the da....